[...] Mr Hammond said he wants a “standstill” transition leaving companies with full access to the single market and customs union, followed by a further “implementation phase” while a new, UK-specific trade accord is put in place.
The chancellor believes it would be a waste of time and political capital trying to persuade the EU to adopt a new legal framework for an interim agreement, according to government officials and business people who have discussed the idea with him in recent days.
The push by Mr Hammond follows a softer line on immigration outlined by Amber Rudd, home secretary, this week and signals growing confidence among backers of a “soft Brexit” that they are gaining the upper hand over hardliners.
Mr Hammond and Brexit secretary David Davis are edging towards a transition deal on terms broadly laid down by Brussels. One British official said the government would seek a “swift, broad and simple” deal.
The EU says the only transition model offering single market access it would accept would see Britain stripped of voting rights and influence in Brussels but obliged to accept European Court rulings, free movement rules and budget contributions.
In a dramatic shift in cabinet thinking on the issue, Eurosceptic ministers including Michael Gove and Liam Fox have indicated they are prepared to accept such conditions for a time-limited period in the interests of a business-friendly exit.
Business leaders called into No 11 Downing Street on Monday to discuss Brexit with the chancellor were told by Mr Hammond that there was not enough time for a “bespoke” deal to be negotiated before April 2019.
“He told us the Europeans now agree a cliff edge would harm both parties,” according to one person at the meeting. The transition would be in place while a UK/EU trade deal was finalised, followed by an implementation phase as it was introduced.
“He was very clear that these were two different phases,” said one attendee. Mr Hammond’s allies say the chancellor believes the transition and implementation phases should end by 2022, the last date for the next election. [...]
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